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4 Stocks That Could Put Nuclear Power on the Moon

In less than three years — in 2025 — NASA could land astronauts back on the moon. The first step will be to launch a Space Launch System rocket on a three-week trip out past the moon and back (without ever landing), in a mission dubbed “Artemis I,” that NASA now says could take place as early as August 29.

But that’s not what we’re talking about today. Today we’re going to talk about what happens after Artemis III, the mission that actually puts boots on the (lunar) ground. And more than that, we’re going to talk about the companies working to make it possible for astronauts to remain on the moon for years to come.

Image source: Getty Images.

Zen and the art of nuclear power plant maintenance

Once you’ve landed on the moon, and once you’ve asked astronauts to stay there and live on the moon — how do you keep them alive? How do you provide the power to keep the lights on, the air machines running, and the moon buggies fully charged?

One possibility that NASA is looking at seriously right now is building a nuclear power station on the moon. To that end, last month the space agency partnered with the Department of Energy (DoE) to pick three industry teams to design a lunar nuclear power station. For $5 million apiece, each of: 

Lockheed Martin (NYSE: LMT),
Westinghouse, assisted by its partner Aerojet Rocketdyne (NYSE: AJRD),
and the curiously named “IX” of Houston, assisted by Boeing (NYSE: BA) and Maxar Technologies (NYSE: MAXR)

…will draw up plans for the construction of a 40-kilowatt class nuclear power plant that can run for at least 10 years on the surface of the moon.

How big of a deal is this?

Now admittedly, 40 kw is not a lot of power — on Earth. The average nuclear power plant in the United States, for example, produces closer to 1 gigawatt, or 25,000 times more power than NASA is looking to put on the moon. Even the solar panels on the International Space Station provide about 160 kw. 

40 kw is, however, a step up in technology from the kinds of nuclear power plants that have been used to power small satellites and space probes since the 1960s, most of which have only produced a few kilowatts of power. 40 kw of hourly output (i.e. 350,400 kilowatt-hours per year) is enough to power about 30 average U.S. homes for a year, and that’s enough to make running a lunar base feasible, in NASA’s estimation. (And if more power is needed, NASA could always send up additional systems based on the initial prototype, or replace it with a larger model.) 

In any case, as the DoE’s Idaho National Laboratory Director John Wagner observes, developing a 40 kw system is already a “very achievable first step toward the United States establishing nuclear power on the Moon.”

As for the companies receiving the contracts, the initial contracts are described as “Phase 1 awards,” which implies that further contracts — worth more than the initial $5 million — can be expected. If NASA follows the usual practice, a “Phase 2” might see one or more of the candidates tasked with building prototype nuclear power plants — followed by one of the three being awarded a final “Phase 3” award to build an operational model and send it to the moon.

NASA hopes that this can happen “by the end of the decade.” 

What it means to investors

How much might a Phase 3 award be worth to the eventual winner? That’s almost impossible to say, because this is something that’s never been done before. According to the World Nuclear Association, nuclear power plants on Earth generally cost on the order of $6,000 per kw to build, implying a $240,000 construction cost for a 40 kw system. That’s clearly not going to be the case here, however, when just working out a plan for building the thing will cost 20x more. 

All I think you can really say is that whoever wins the contract to build a nuclear power station on the moon can expect to be paid a lot for the first unit.

Beyond that, NASA notes that a nuclear power plant that can work on the moon could just as easily be used to power spacecraft on “deep space exploration missions”. And that implies that whichever of these companies survives Phase 1 and emerges the winner of the whole nuclear enchilada can anticipate winning more than just revenue from building a power plant on the moon. It may end up designing the standard nuclear reactor to be used on future spacecraft — almost by accident — with all the revenue potential that implies. 

For space specialists Lockheed, Aerojet, Boeing, and Maxar, that makes this a contract worth winning.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

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